Mumbai: GMR Infrastructure Ltd on Tuesday said its subsidiary GMR Airports Ltd (GAL) has signed a concession agreement with the government of Goa for development and operation of north Goa’s greenfield international airport at Mopa.

As part of the agreement, GMR will design, build, finance and operate the international airport for 40 years with an extension option for another 20 years, the company said in a statement on Tuesday.

“The construction period for the first phase of the project is three years from the date of financial closure and is expected to be operational by mid of 2020," GMR Infrastructure said.

The present airport at Dabolim in Goa has already exceeded its capacity of handling five million passengers a year.

In August, GMR had won the project through international competitive bidding; with Airports Authority of India emerging as the second-highest bidder followed by the Essel Infraprojects Ltd-Incheon consortium.

The project will operate on hybrid till model with 30% cross subsidy. It is expected to cost Rs3,000 crore.

Also read: GMR wins bid to build Goa’s second airport

Airlines prefer single till model of economic regulation as it reduces airport charges, while airports prefer dual till. Some airports have a middle path of regulation called the hybrid till.

The concession offers 232 acres of land for commercial city side development for a period of 60 years, GMR said.

GMR Airports Ltd runs India’s busiest Indira Gandhi International Airport in Delhi, and Hyderabad International airport. The Delhi airport handles about 46 million passengers a year while the Hyderabad airport handles 40 million passengers annually, the company said.

GMR Infrastructure, in partnership with Megawide Construction Corp, is also developing Mactan Cebu International Airport (MCIA) in the Philippines.

In October, the company also submitted a bid with partner GEK Terna Group of Greece for the development, operations and management of New International Airport of Heraklion at Crete Island, Greece.

GMR Group has been struggling under the weight of heavy debt. With business interests in airports, energy and infrastructure, the group has a consolidated debt of Rs39,154 crore.